New Navy hydrographic vessel represents a R1.8 billion investment

The Commander-in-Chief of the SA National Defence Force (SANDF), President Jacob Zuma, has confirmed the investment detail of at least one of the new hull acquisitions for the SA Navy.

Speaking in Durban last week where he was giving an update on the implementation of the Oceans Economy component of Operation Phakisa, Zuma said the investment needed for a new hydrographic vessel for the SA Navy was in the order of R1.8 billion.

It also appears from remarks made by him that Southern African Shipyards (SAS), named preferred bidder for Project Hotel, will be the main contractor. SAS will be tasked with the construction of a new hydrographic vessel to replace the SAS Protea as well as supplying ancillary equipment including two fully integrated inshore survey motorboats and upgrading current shore-based hydrographic office infrastructure at Silvermine.

Before he spoke, the President visited SAS where seven of nine “specialised super tugboats” have been built. Zuma said this was a demonstration of South Africa’s capacity and capability to build specialised vessels. The contract value is R1.4 billion and it has created around 500 jobs. It is the largest contract ever awarded to a South African company for the building of harbour craft.

The tender for a new hydrographic vessel was issued in July 2014 with submissions accepted until June 2015. As recently as two weeks ago Armscor indicated negotiations were still underway and there was no indication when the “preferred” bidder status would be changed to “confirmed”.

“The appointment of a contractor is subject to the successful negotiation of detailed technical and commercial conditions with the aim of arriving at a contracting position for execution of the project.

“The procurement process is still underway and not finalised and once negotiations with the preferred bidder are concluded, there is another process involved – obtaining the necessary approvals from the various approval structures in the Department of Defence,” Solomzi Mbada, Armscor Group Executive: Corporate Support, said on 27 September.

On Project Hotel Zuma said: “The SA Navy seeks to build their complex and specialised hydrographic survey vessel to map the sea floor, an investment of approximately R1.8 billion”.

The maritime arm of the SANDF was also looking to acquire six patrol vessels – three each inshore and offshore – to boost its capability to patrol South Africa’s maritime resources, including oil, gas and protect its fish stocks. This has been cut to only the three inshore vessels with the Request for Offer (RfO) for the offshore vessels cancelled in August.

In his speech giving an update of Phakisa, Zuma said that since it was launched in 2014, the government has unlocked investments totalling R24.6 billion with a government contribution of R15 billion. “Over 6 500 jobs have been created through this Oceans Economy segment of Operation Phakisa,” Zuma said.

“The largest contribution to the total investment in the oceans economy was from infrastructure development, mainly in our ports, manufacturing, mainly in boat building, aquaculture and scientific surveys in the oil and gas sector, having been facilitated through Government incentives.

“From our own analysis, the total ocean sectors contribute approximately 4.4% to South Africa’s GDP, with the largest contribution coming from the value chains.”

Zuma said the government intends to establish the KwaZulu-Natal Boatbuilding Park as part of the maritime vessel industrial complex at Bayhead in the Port of Durban. “The boatbuilding sector has long been recognised in our strategic plans as a major opportunity to stimulate new investment, exports and job creation. The park is planned to be a world-class space for the production and repair of leisure and commercial boats. It will be the single largest boat building facility in Southern Africa.”

The project represents an investment of more than R250 million and will have the capacity to produce up to 150 boats annually, mainly for the export market.

Other Phakisa maritime progress has seen the completion of the Outer Dry Dock Caisson to improve safety in Durban; improvements to facilities in Port Elizabeth; the commencement of operations of the Burgan Fuel Storage Facility at the Port of Cape Town; the development of a cruise terminal in Cape Town; the commencement of operations of the Sunrise Energy Liquid Petroleum Gas Facility in the Port of Saldanha Bay; the construction of the Offshore Supply Base berth at the Port of Saldanha; and the issuing of fourteen exploration rights, six production rights and two technical cooperation permits in the offshore oil and gas sector. Zuma also noted that there are 36 aquaculture projects underway.

“With regards to policing and protecting our Exclusive Economic Zone, Joint Operations continue to be conducted in all four coastal provinces as part of the coordinated enforcement programme with numerous arrests and confiscations that happened,” Zuma said.

“The National Ocean and Coastal Information System is being piloted as a decision support tool in respect of vessel tracking. We are now in a better position to locate vessels, especially the ones entering our waters illegally and those engaging in illegal activities.”